The Reserve Bank of India (RBI) has decided to boost the risk-based supervision (RBS) of banks and non-banking financial institutions (NBFCs) in the country.

The move is aimed at addressing the evolving challenges for players in the banking space.

Intended to supervise the banks, the RBS model includes both qualitative and quantitative elements.

As part of the new decision, RBI is seeking bids from technical experts/consultants to undertake the process for the banks.

In a press statement, RBI said: “It is now intended to review the supervisory processes and mechanism in order to make the extant RBS model more robust and capable of addressing emerging challenges, while removing inconsistencies, if any.”

The RBI is inviting bids for ‘Consultant for Review of Supervisory Models’ in case of UCBs and NBFCs.

“It is intended to review the existing supervisory rating models under CAMELS approach for improved risk capture in forward looking manner and for harmonising the supervisory approach across all SEs,” RBI noted.

In the case of UCBs and NBFCs, the RBI conducts the supervision through a mix offsite monitoring and on-site inspection.

In connection with Expression of Interest (EOI), the documents submitted by the applicants will be examined by a technical advisory group consisting of RBI senior officers.

In case of the Supervised Entities (SEs), the RBI undertakes supervision to assess their financial soundness, solvency, asset quality, governance framework, liquidity, and operational viability in a bid to protect interests and financial stability of depositors.